Restructuring for Redemption

Bally Total Fitness owners are hoping a judge approves their restructuring plan and their deal with lenders to exit Chapter 11. But a large group of disgruntled former and current customers are probably hoping Bally's plan includes more than moving money around. Bally's members have a long list of complaints, and this is the company's chance to make a new name for itself.

First on the list ought to be a more customer-friendly cancellation process. I'm not saying Bally's ought to stop holding customers to their signed contracts, but they should improve their communication protocols so that members who want to quit are re-informed of what Bally's requires of them.

Second, the company should improve staff training. Bally's is a huge chain. Its employees' dismal customer service reflects on all fitness facilities, whether it's fair or not.

The web is overflowing with negative Bally's reviews, and the company has struggled financially. This is a golden opportunity for Bally's to clean up its reputation. I hope it's not wasted.

A New Idea

I’ve never liked people who criticize someone without offering their own ideas for a solution. It’s counterproductive and, on some level, cowardly.

Last week I said believe Planet Fitness’ low-priced membership strategy may cause long-term harm to the industry. Whether I agree with it or not, it is a valid attempt by a successful business to find a solution for a problem every club is facing: getting more customers in an economic crisis. And, in the spirit of my statement above, I would be remiss if I didn’t offer another possible solution for clubs looking to lower prices without devaluing their services.

Here is my idea:*

Forget the “Pay as You Go” membership model. What about “Pay as you DON’T Go”?

Clubs want to build loyalty, right? You want your clients to build fitness into their routines, value the services they receive at the club, want to spend time there. Why not reward them for doing exactly that?

Say each club visit is worth $5. You establish an “ideal” visit rate of three times per week, averaging out to $60 per month. So, the member’s base fee is $15 per week. If they go once a week, knock $5 off their dues. Twice a week, knock off $10. Three times per week, and that week is free. Your members are saving money by working out at your club.

And while these sensible members are at your club, sell, sell, sell. Sell personal training sessions, sell smoothies, sell weight gloves, sell private Pilates lessons. Sell the heck out of everything you’ve got without being too aggressive or annoying.

If you employ this model, you’re obviously taking a risk. What if members do exactly what you want them to and come to the club like clockwork? Perhaps you could establish a base fee, and the $5 per visit is on top of that. What if members stop by on their way to the grocery store, swipe their card at the front desk and count it as a workout? Perhaps you could require members to swipe in and swipe out, with a minimum visit length of 20 minutes. Problems will pop up, but so will solutions.

Now’s your chance to tell me why you think this idea won’t work — or why it will. The comments are open.

*Whether you love it or hate it, I promise this is my own idea. I thought of it at my dining room table while nursing an epic Easter head cold. However, if another club has already come up with a similar idea, please let us know in the comments section.

The Dollar Dilemma

Have you heard? Planet Fitness has devalued the fitness industry lowered its dues to an offensive amazing $1 sign-up fee and $10 monthly dues with no commitment requirements! Isn’t that awful great?

It’s not like I didn’t expect this. Businesses lower prices to compete. But even if this means Planet Fitness can keep its lights on for another month or so, what does it mean for the industry after the economy rights itself?

Will the fitness industry end up like the airline industry? Airfare wars have driven prices so low that I wonder how long it takes before somebody offers to pay me to fly, instead of the other way around.

A $10-per-month price-tag is ridiculous. I can’t see how this lowball strategy will help the industry in the long run.

What am I missing? How can this possibly be a good idea? I seek enlightenment in the FM Blog’s comments section …

Operation: ReLaunch

Have you heard about The Collective? The Michigan chain operation is a kind of blended facility that offers members access to workspaces, music and art classes and a 20,000-square-foot fitness center. I admire its scope. Building a community by adding a coffee bar in the front desk area is one thing; offering meeting rooms, wi-fi and other business-related amenities takes the concept to another level.

But with the economy tanking, The Collective is taking a hit. Struggling small businesses aren’t as willing to shell out extra money to hold a meeting in a unique location — if they have meetings on the books at all. But The Collective isn’t sitting back and waiting for things to get better. Instead, it’s initiated an interesting, four-pronged program called ReLaunch aimed at Michigan’s unemployed. It focuses not only on building up resumes, but also building confidence by way of a reduced $50 fee good for three months’ use of the fitness center, along with workshops designed to give participants the tools to get their careers — and their lives — back on track.

I like the message this program sends. It gives a life expectancy to members’ hard times: three months. It gives them a place to go to look for work that connects them with other people suffering similar hardships, and it gets them out of the house. It’s harder to be depressed about being unemployed when you don’t feel unemployed, and that’s probably the biggest favor this program does for people with an extra $50 in the couch cushions.

It’s a positive, feel-good program. For everyone’s sake, I hope it works.

In the Spotlight

The tax-exempt status of non-profit fitness centers is the subject of a long-standing debate in the fitness industry. It hasn’t always taken center stage but, thanks to the current economy, that seems to be changing.

Now, the spotlight is shining brightly on non-profit fitness centers as states and cities explore new ways to get desperately needed funds.

Winchester, Va., is considering taxing hospital fitness centers.

The State of North Dakota tried to pass a bill that would allow levy property taxes on some nonprofit organizations, including YMCAs. The bill failed, but some lawmakers are still pushing to tax those businesses for police and fire protection.

Local governments are cutting or reducing funding. Bar Harbor, Maine, slashed taxpayer funding by $41,000 for the Mount Desert Island YMCA. Instead of getting $56,800 from the city, the YMCA will now receive $15,000.

Some will call this an overdue leveling of the playing field. Others will call it a devastating blow to communities and under-served populations. The debate will continue, and we can expect that scrutiny of some businesses’ tax-exempt status will only intensify.

We won’t all make it through to the other side of this recession. But those who do — for-profits and non-profits alike — will likely be faced with a new industry landscape. It's anyone's guess which fitness businesses will be in the spotlight then.

Same-Boat Marketing

I’m going to be honest. “Same-boat marketing” is not a real term. I made it up. But even though you won’t see it bolded in any marketing textbooks, same-boat marketing is a technique all fitness clubs should use while the economy is in recession.

National Public Radio’s Morning Edition did a segment about marketing strategies in a recession. It highlighted companies that are focusing on building connections and bonds with consumers to boost sales. Most interesting was Hyundai, a savvy (and struggling) automaker that has thrown itself into the same boat as consumers with an innovative new program.

Hyundai Assurance allows consumers to finance or lease a new car with a simple promise: If consumers lose their income in the next year, they can return the car. No fees, no debt, no guilt. “We’re all in this together,” Hyundai’s ad says. “And we’ll all get through this together.”

It’s a great idea, and fitness facilities would do well to devise their own assurance programs. Let consumers buy a one-year membership at full price with the assurance that they can immediately cancel their membership without penalty if they lose their job within that year.

Buying anything is a risk in this economy, so share that risk with your consumers. Get in their boat and earn their trust. In the long run, you’ll earn their loyalty, too.